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Natural Gas Prices– Weekly Recap 21-25 November

November 27, 2011

Natural gas spot price continued to sharply fall during most of last week, while the Henry Hub future price started to rise again. Due to these changes the Contango reached new highs during last week: by November 23rd the gap between the Henry Hub future (December delivery) price and the Henry Hub spot price reached $0.63 – the widest gap since November 2nd 2010. The Henry Hub spot price reached during last week a low price of $2.83 – the lowest price level since November 16th, 2009.

The high natural gas storage levels (see below) compared with the five year average and the slightly warmer than normal temperatures in the Northeast might be among the factors to impede the expected growth in spot price.

Here is a short review of the main changes in natural gas prices for the week ending on November 25th:

Natural Gas Prices November – Weekly Review and Analysis

Nymex Henry Hub Future Price (December delivery) sharply declined during last week by 4.07% and reached on Friday $2.83/mmbtu; its average daily change was -2.05%, and its weekly average price was 5.24% below the previous week’s average price.

Natural gas spot price (Henry Hub) on the other hand sharply rose by 4.12% during the week, and its average price was 2.04% above last week’s average price.

The difference between the Henry Hub future and spot gas prices, i.e. future price minus spot price (if the spot prices are higher than the future prices its called Backwardation, if future price is higher than its called Contango) was still in Contango during the week, and by Friday the gap reached $0.71/mmbtu.

Natural Gas Prices Charts

The following charts present the daily changes of natural gas prices (Henry Hub)and futures prices (NymexHenry Hub) in $/mmbtu during November 21 to 25.

The first chart shows the development of natural gas spot price and Henry Hub future price during the week: the Henry Hub future price slightly rose during the while the Henry Hub spot price declined.

The final chart presents the dailypercent changes of natural gas spot price (Henry Hub) and Nymex Henry Hub future price. The sharpest falls for the natural gas spot price came on Wednesday.

EIA Natural Gas Report – Highlights:

The underground natural gas storage (Billion Cubic Feet) rose last week by 9 Bcf to 3,852 billion cubic feet for all lower 48 states; the current natural gas storage is 6.4% above the 5-year average, and is 0.6% above the storage level during the same week in 2010.